Question: Remember Center City Cake Shoppe? They now have a big business serving Philadelphia and its suburbs. They did not change the business model. The shop

RememberCenter City Cake Shoppe? They now have a big business serving Philadelphia and its suburbs. They did not change the business model.
The shop still spends $15 in making each cake, and has a regular selling price of $25.
For every customer facing a stockout, the Cake Shoppe has estimated that there is a goodwill loss of $5(over and above the lost margin on that sale).
Unsold cakes at the end of the day are sold below cost, at $10, and are always sold off before the store closes for the night.
Their daily demand distribution is now:
DemandProbability500.10600.15700.25800.25900.151000.10
1. The optimal service level for this business is [ Select ]["50%","75%","90%","100%"].
2. Given this optimal service level, the optimal quantity to hold is [ Select ]["70","80","90","100"]
3. Given this optimal quantity, the expected sales is [ Select ]["50","71.5","75","100"] while the expected demand is [ Select ]["50","71.5","75","100"].
4. The fill rate is [ Select ]["75%","90%","95%","100%"] approximately.
5. Center City Cake Shoppe is going to earn the highest profit per day with the above service level, and that profit will be $[ Select ]["600","655","675","700"]

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